The world of digital advertising is absolutely different that it used to be even 10 or 15 years ago. We have shifted from direct inventory buying to a more centralized process where ad networks were of great help for us. However, it is no reason for technologies stop and programmatic advertising has come to us. If for the first system, marketers coped somehow with all definitions and game rules in whole, but a new approach is till treated suspiciously. Today we will try to clear the skies a bit and discuss main difference between traditional ad network and one of programmatic components – Demand Side Platform (DSP).

What advertising network is about?

In its traditional understanding, there is no programmatic part. The network buys inventory from Publishers. Generally, they buy that part that couldn’t be sold directly to an Advertiser. There are ad networks for advertisers and publishers.

Their main advantage is about that direct contacts are not always possible, especially if you want to sell somewhere abroad. Networks offer variety of websites that may suit to Advertisers needs when he wants to cover the audience as much as possible.

Companies and individual websites owners often apply to them to launch different types of campaigns and, thus, need different types of devices being covered (desktops or mobile gadgets), having different pricing models (CPA, CPC, CPM or others) and places for displaying (websites, mobile audience, applications) etc.

There are only two points that may frustrate participants in this triangle:

Financial side

Transparency issue

Ads on the network are more expensive than direct advertising. It can be explained by a simple fact that all that buzz, from negotiations with clients up to support and maintenance systems should be paid, besides, the network itself wants to have some income from the business.

The second point is about honesty. Both Publishers and Advertisers should keep an eye on the process as nobody is saved from fraud activities.

Demand Side Platforms

If you remember, the idea of programmatic is having the buy-sell process automated and reminding an auction manner. We cannot physically attend several places at once, let’s say here, auctions, but DSP does it. It connects to several platforms of programmatic nature and offer several variants for Advertisers to choose which ad impression to buy.

The process of bidding is quite transparent for everyone to see the features of particular impression (visitor’s location, approximate age, device type and so on) and which price will be acceptable.

Main advantage here is that we speak not about websites where potential audience may hang out, but try to use personalized approach to each visitor. The ads of fashionable bags can be shown to a lady if she her online behaviour allows to make a provision she would be interested in that stuff, for example, she read fashionable online magazines and recently responded on Gucci last collection leaflet.

In such a situation, people stop treating advertising as something irritating and distracting. According to surveys, people are ready to click on ads if they are relevant to their current needs and interests.

Is programmatic better?

Well, it’s better not to be so categorical here. Marketers are still suspicious about a new technology as something really new. But both of the approaches have what to learn from each other what we are facing now: ad networks started acquiring something from programmatic approach and, vice versa, traditional technologies are implemented into DSPs and the area in whole. It would be wrong that we are going to see a displacement of one technology by another, it is more likely to have a fusion of them in the near future. And while we have both options at the moment, it would be better to implement them all to get higher results.